Teresa Amabile

Bonuses and pay-for-performance plans can even be problematic when people believe that every move they make is going to affect their compensation. In those situations, people tend to get risk averse. Of course, people need to feel that they’re being compensated fairly. But our research shows that people put far more value on a work environment where creativity is supported, valued, and recognized. People want the opportunity to deeply engage in their work and make real progress. So it’s critical for leaders to match people to projects not only on the basis of their experience but also in terms of where their interests lie. People are most creative when they care about their work and they’re stretching their skills. If the challenge is far beyond their skill level, they tend to get frustrated; if it’s far below their skill level, they tend to get bored. Leaders need to strike the right balance.

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